The data splurge at 08:30 EDT / 12:30 GMT could not be characterized as anything other than ‘disappointing,’ as both major US data releases severely undershot estimates and pointed to a significantly weaker US economy. There is little doubt that if the Federal Reserve did not implement QE3 at its September meeting, it definitely would have in October after seeing today’s releases.

The second quarter US Gross Domestic Product figure was revised down to an annualized rate of +1.3% from +1.7%, a surprising development considering not one estimate, according to a Bloomberg News survey, had expected a revision this low. In part, the decline was due to a slowdown in consumption: Personal Consumption fell to +1.5% from +1.7% in the second quarter. This is important because consumption accounts for nearly 75% of the aggregate GDP figure.

Also due out ahead of the US cash equity open was the Durable Goods Orders print for August, which missed massively. Orders contracted by -13.2% from last month, versus -5.0% m/m forecasted, according to a Bloomberg News survey. If there is a silver lining to the print, it’s that Capital Goods Orders (Non-Defense) ex-Aircraft gained by +1.1% m/m (though the July figure was revised down to -5.2% m/m from -3.4% m/m).

Following the release, the USDJPY dropped from 77.66 to as low as 77.57, before rebounding to 77.62, at the time this report was written. The US Dollar was generally weaker across the board, with the Australian Dollar and the Euro perking up against the world’s reserve currency after the release as well.